What comes next

What the model cannot do yet, and the order in which these mechanisms will arrive in the game.

In plain words

The studio starts the model simple and builds it up one mechanism at a time, as recommended by the authors of the small IMF model whose structure it takes over (Berg, Karam and Laxton 2006). Yet each equation is already written out in full. When it needs a quantity that the game does not compute yet, such as the exchange rate, that term is held at a neutral value in the meantime, and this page lists these terms.

What the equations are waiting for

Several equations have a term that needs the exchange rate, the share of the debt owed in foreign currency or who holds the debt. Such a term is called an unknown. It is held at a neutral value, the one that leaves the equation as it would be without it, so the equation works while it waits for the matching mechanism to arrive.

Identifier	Equation	Held at	What its absence distorts	Arrives with
`exchange_rate_on_demand`	E1, demand	0	A currency that depreciates does not boost exports, and a currency that appreciates does not hold them back. `rate_sensitivity` (0.16) was taken from the range for the combined effect of the real rate and the exchange rate, and it will have to be split between the two.	the exchange rate
`foreign_demand_on_demand`	E1	0	A partner's recession is not passed on, since each country depends only on itself.	trade
`public_investment_on_potential`	E2, potential GDP	0	Investing does not raise long-run growth, and the player has no lever over it.	the breakdown of spending and public investment
`imported_inflation`	E4, the Phillips curve	0	Neither the exchange rate nor world prices (oil, food) pass through into prices. Because episodes of high inflation often end when the currency stabilises (Fischer, Sahay and Végh 2002), a country that has lost its credibility takes, without this mechanism and without a stabilisation plan, several decades to bring its inflation down (§8.2).	the exchange rate
`hysteresis_on_nairu`	E6, Okun's law	0	A long recession does not raise equilibrium unemployment.	hysteresis
`exchange_rate_on_policy`	E7, the Taylor rule	0	The central banks of emerging countries do not respond to their exchange rate, although in reality they do (Mohanty and Klau 2004).	the exchange rate
`foreign_currency_debt_premium`	E10, the borrowing rate	0	All the debt is in the national currency, so a depreciation never makes it heavier and the premium takes no account of debt in dollars.	the exchange rate
`interest_in_income`	E14	0	Interest on the debt does not count in household income, because we do not know who holds the debt among households, firms and foreigners.	households and firms in the accounts
`incumbent_terms_at_start`	E15, elections	1 term	Every government in office at the start is treated as being in its first term, so Abramowitz's time-for-change penalty only applies after a re-election during the game. In France, though, the incumbent camp, in power since 2017, should already face it in 2027.	data on the terms already served by each starting government
`currency_crisis_inflation`	E16, default	0	A default comes with neither a currency crisis nor the inflation that follows, whereas 84% of defaults go through one within two years (Reinhart 2002).	the exchange rate
`pressure_on_central_bank`	E17, credibility	0	A government that puts pressure on its central bank does not make it lose credibility through that fact alone, since only observed inflation lowers it. Yet Drechsel (2024) measures the effect of such pressure on expectations.	a “central bank independence” lever

What is missing and is not a term

Some gaps do not fit into an equation term, because they need a structure that the model does not have yet.

Monetary union. Each euro area country has its own central bank, and so do the CFA franc countries.
Sectors. There is only one private sector, and households, firms, banks, the central bank and the rest of the world do not yet have their own row in the transaction-flow matrix.
The assets of sovereign wealth funds. The model only knows gross debt. Macao, whose starting deficit is paid from its reserves, therefore falls outside its domain.
The electoral calendar. A country with no national election in Wikidata has none in the game, which is right for Saudi Arabia but wrong for Denmark, a country Wikidata describes poorly. Outside France, for lack of verified dates, the assembly is elected at the same time as the government (E21).
Political crises. Between two elections, a government falls only through a default, never through a motion of censure, a coalition breaking up or a coup, and a regime never changes (E22, E23). The parties do not move either. Their positions stay those of 2019, and no party is born or disappears (E19).
An effect specific to each budget line. A point of pensions weighs on the economy like a point of investment, and a point of VAT like a point of corporate tax. Yet studies measure different effects depending on the line (E26).
The choice to default. Default is imposed on the player, who cannot decide to restructure their debt themselves.
The stabilisation plan. Nothing restores at a stroke the credibility of a central bank that has lost it, whether a new law, the adoption of a target or a currency board. Yet this is how episodes of high inflation end, as in Israel in 1985 or in Brazil in 1994, whereas in the game they only end slowly.
Quarterly recessions. Counted in years, recessions have the frequency and depth found in the data, but dated quarter by quarter, they are three times too frequent in advanced countries, with 3.7 recessions per decade against 1.2 in the OECD from 1960 to 2007 (Claessens, Kose and Terrones 2008). No term is missing here, and it is the shape of the shocks that needs revisiting with quarterly data (E13).
The debt limit of emerging countries. It is derived from the limit of advanced countries, so the risk for a median emerging country only starts at 121% of GDP, whereas more than half of the defaults of middle-income countries took place below 60% of external debt (Reinhart, Rogoff and Savastano 2003). External debt would need to be treated separately, or this threshold translated into public debt.
The asymmetry of price shocks. Shocks are symmetric, whereas real inflation shoots up more often than it plunges.

The order in which mechanisms are added

One mechanism at a time, each one played before the next. Done on 23 September 2026, in the order the studio chose, which lets the player lose before trade arrives: shocks (E13), purchasing power in popularity (E14), elections (E15), the confidence crisis and default (E16), credibility (E17). Then, in a second version, the corrections of §8: bell-shaped monetary transmission, benefits in purchasing power, stabilisers through spending. Finally, at the studio's request, the common share of the shocks (E13) and the world events (E18), both adjustable. What comes next, with what the literature review has already found:

A stabilisation plan (player's lever): a jump in credibility when the government puts its budget in order and commits its central bank. No source puts a figure on this jump. It would be calibrated on the observed ends of inflation: Israel in 1985, from 445% to about 20% in eighteen months (Bruno 1986; Bufman and Leiderman 1995); episodes above 100% last 40 months on average, and inflation in the twelve months after they end is about 33% a year at the median (Fischer, Sahay and Végh 2002, table 3a; the median is a calculation on their table A1); inflations of 15 to 30% most often last three years, and end with a fiscal contraction, an incomes policy and an exchange-rate commitment (Dornbusch and Fischer 1993); Brazil in 1994 got back to single-digit inflation in less than three years; adopting inflation targeting reduces the sensitivity of expectations to surprises by 0.498 (Kose et al. 2019); when poorly anchored, expectations leave shocks with a lasting effect (Bems et al. 2021). According to Sargent (1982), big inflations stop with a fiscal reform. Non-player countries would need it too.
The effects of disasters by type, and the location of floods: earthquakes, cyclones and droughts already strike where they strike (E18), and drought acts over two years (Fomby, Ikeda and Loayza). For earthquakes, cyclones and floods, the studies contradict one another. In the IMF's own sample, no type differs on impact, with storms and droughts rebounding more in the following year (table 8). Earthquakes cost the most according to Felbermayr and Gröschl (2014), and have no effect on output according to Fomby et al. and Loayza et al.; moderate floods raise growth, severe ones do not; the loss from a cyclone grows for fifteen years according to Hsiang and Jina (2014). Flood data that can be redistributed do exist, in the JRC maps of 2016 (CC BY 4.0).
Credit ratings and fiscal fatigue. A rating as a function of income per capita, growth, inflation, external debt and a past default (Cantor and Packer 1996); −20% on the rate spread for each notch gained; the response of the balance to debt, which weakens from 90-100% and turns negative around 150% (Ghosh et al. 2013); LIC-DSF thresholds for low-income countries (35, 55 or 70% in present value); the average fall of 64 points of debt after a default (Abbas et al. 2011), to check the haircut of E16. The choice to default, softly or harshly (Trebesch and Zabel 2017: −0.57 points of growth per notch of coercion).
Bilateral trade (gravity). Bilateral shares × import demand: distance −1.14, common border +0.52, language +0.33, colonial link +0.84, regional agreement +0.28 (structural gravity, meta-analysis by Head and Mayer 2014); import demand with an income elasticity of 1.45 and a price elasticity of −1.08 in the long run, 90% of the effect within five years (Senhadji 1998); elasticity of substitution between suppliers of −5.03 (Head and Mayer) or −4 (Simonovska and Waugh 2014); as a safeguard, one point of growth among partners transmits no more than 0.8 points (Arora and Vamvakidis 2005). It is also the mechanism that will turn the test “a country run absurdly does not affect the others” from trivial into meaningful.
The exchange rate and the current account; monetary union. A single Taylor rule on the union's aggregates, weighted by GDP; rate spreads that are quadratic in debt within the union (De Grauwe and Ji 2013: 5, 12.5 then 21.5 basis points per point at 60, 100 and 150%), and zero for countries with their own currency; the ECB safety net (−2 points on the 2-year rate of Italy and Spain, Altavilla et al. 2016). It will fill half of the unknowns: imported inflation, foreign-currency debt, the currency crisis that follows 84% of defaults, and the effect of the rate on prices that advanced countries are missing.
The detail of taxes and spending (§5.2), and public investment, which raises potential: +0.4% of GDP in the first year and +1.5% after four years per point of GDP invested in advanced countries (IMF, October 2014 WEO). It is the player's first lever on the long run, and it will also separate benefits from the rest of spending.
Hysteresis. One point of output gap for one year leaves 0.16 points on unemployment and on equilibrium unemployment (Ball and Onken 2021).
Full popularity. Comparison with other countries (Kayser and Peress 2012), rally effects (+5 to 7 points in the first month, Kernell 1978), asymmetric losses (a deterioration weighs three times as much as an improvement, Nannestad and Paldam).
Households and firms in the accounts (consumption, investment): the share of “hand-to-mouth” households, 15 to 50% in the United States and 25 to 40% in the EU, and a propensity to consume tax rebates of 0.5 to 0.7 (Coenen et al. 2012).